Mad Cows, Meat Inspection, and Regulation
by Charles Goyette: Oil
Speculators: A Force for Peace?
funny about Mad Cow Disease.
But after the
announcement this week of the discovery of an infected dairy cow
in California, I couldn't help but think of a friend of mine, a
stand-up comedian, who has a line about solving the actuarial problems
of Social Security and Medicare by ending the state's "intrusive
inspection of meat."
It gets a big
laugh, but provokes an important question: What would happen if
the state did not inspect meat or other food products?
After the discovery
of bovine spongiform encephalopathy (BSE), better known as Mad Cow
Disease, in the U.S. in 2003, Japan halted the importation of American
a desire to resume selling to Japan, Creekstone Farms in Kansas
invested heavily and built a testing lab so that it could independently
test all of its cattle. This was a challenge to the USDA which,
captured by the food industry it regulates, supports only random
It should go
without saying that large U.S. meatpackers opposed Creekstone's
effort to pioneer new and improved testing protocols. A meat industry
spokesman insisted that any testing should only take place under
government oversight. In 2006, Creekstone was forced to sue the
USDA for refusing it permission to test all of its cattle. In 2008,
a U.S. Court of Appeals overturned a lower court ruling that would
have allowed Creekstone to proceed. "We owe the USDA a considerable
degree of deference," wrote a judge in the case.
in public safety is fraught with the same shortcomings as central
planning elsewhere in the economy. It stifles progress and innovation,
drives up costs, and protects powerful interests from competition.
These are not shortcomings of regulation; they are the intended
Stigler, a Nobel laureate, has made the case that state regulation
is designed to provide special privileges to regulated industries,
protect them, and raise prices on their behalf. Of course this "regulatory
capture" in which the regulators actually serve their industries
is exactly the opposite of what the governing classes promise the
public. Instead, regulating agencies restrict competition in ways
that actually victimize the public. Stigler has suggested that "every
industry or occupation that has enough political power to utilize
the state will seek to control entry."
replace the "intrusive inspection of meat" In the absence
of the state? Has the state even been doing a good job in its inspections?
That is a question that can only be answered by asking "compared
Would the "poke
and sniff" method of feeling and smelling meat the mainstay
of USDA inspections for almost a hundred years but one that cannot
detect pathogenic bacteria and microbes like E. coli have been
improved on many years earlier than it was by innovators in a free
economy looking for better ways of doing the job?
It is impossible
Would one uniform
standard of inspection have emerged, so clearly superior that it
would go unchallenged? Or would there be many means of testing for
food safety, each one offering greater thoroughness and more efficient
costs than the next? It is impossible to know until creative minds
attack the problem, a prospect that is sharply reduced in the presence
of the state's monopoly.
If there were
a widespread outbreak of Mad Cow Disease, how many would suffer
needlessly because regulatory capture blocked new advances is testing?
Innovations that never see the light of day, held back by the regulatory
state, cannot be known. But in a free economy it is foolish to think
that people wanting wholesome food will flounder about and go unsatisfied
in the absence of the state.
is adapted from New York Times bestselling author Charles
Goyette's new book Red
and Blue and Broke All Over: Restoring America's Free Economy.
© 2012 Charles Goyette
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